Which Is Not a Commonly Heard Argument for Protectionism

question 175

Multiple Choice

Which is not a commonly heard argument for protectionism?

• A) A strong national defense requires that some military products be produced domestically.
• B) Infant industries need short-term protection from foreign competition in order to grow.
• C) Specialization along the lines of comparative advantage can lead to some economic instability in a nation.
• D) When other nations' economies grow, they typically import fewer goods and services.

---

Definitions:

Investment Opportunity

A situation or option through which an investor can potentially increase their wealth by allocating resources in a way that generates returns.

Margin

Net operating income divided by sales.

Contribution Margin Ratio

The percentage of each sale that contributes to covering fixed costs, calculated as contribution margin divided by sales revenue.

Fixed Expenses

Expenditures that stay unchanged despite differences in the volume of production or sales, covering items like rental fees, payroll, and coverage costs.